FIN 210: Business Manager Responsibilities
To describe business manager responsibilities for reviewing financial reports
Business managers and others performing business manager functions
Business managers must review the monthly financial reports for their areas, including lower-level operating units. This review may include a review of monthly rollup reports or other available monthly reports where rollup reports are not available. The monthly reviews typically should be done within 30 days of the report preparation date (in the upper left-hand corner of the report). Business managers should:
If significant financial variation is apparent, the business manager must determine the cause for the variation, take corrective action in a timely manner, and report the variation to higher-level management (for examples of the types of variations, see “Significant Financial Variation” and “Insignificant Financial Variation” below).
|Note:||Financial irregularities may or may not cause any significant financial variation in the accounting records. Financial Services will notify university management of any significant financial variations that come to attention of the office.|
In addition to reviewing the monthly reports, business managers must also fulfill any org manager responsibilities assigned to them, e.g., reviewing the monthly reports for agency/orgs of their direct supervisor.
Upon request, Financial Services provides consulting assistance to business managers on the accounting data reflected in the monthly reports and on accounting techniques useful to business managers.
|Note:||For Local Budgeted Fund Accounts, the reviewer may need to add back to the current fund balances the outstanding encumbrances. Personal services are encumbered at the beginning of the fiscal year for the entire year’s salary and deducted from fund balances at that time; these encumbrances cause many local agency/orgs to have deficit fund balances after encumbrances, but still positive fund balances before encumbrances.|
For the business manager, determining what a significant financial variation is or what is expected of him or her is a judgment decision. Examples of financial variations are described below.
|Example:||The College of Veterinary Medicine Local Budgeted Funds have a positive year-end budgeted fund balance of $250,000, yet the monthly report shows a current deficit fund balance, after add back of outstanding encumbrances, of $150,000.|
For this example, the business manager needs to investigate why the actual financial results are significantly different from the budget.
|Example:||The College of Veterinary Medicine has a positive year-end budgeted fund balance of $250,000 and the monthly report shows a current positive fund balance, after add back of outstanding encumbrances, of $175,000.|
Under most circumstances, this type of financial variation would not cause concern. Even though the actual fund balance is less than budgeted, the actual financial results may not be beyond what can be expected, and the present shortfall could simply be the result of timing differences during the year.
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